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Posts: 17
Registered: ‎10-17-2007
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Should I drop this frickin card or what?

Firstly I'm realllly sick of debating this.  But I'm trying to figure out what to do by the end of this month. 

 

Anyhoo....I got a new Capitol One card ($3,000 limit) and consolidated CompUSA ($2500 limit) and First Premier Bank credit cards ($600 limit).  No interest for a year, no annual fee....however I'm able to pay off the balance ($1,800...something like that) within 6 months. 

 

Now...my issue is that I've had the First Premier card since '04.  It's my oldest.  But, it cost the most.  The annual fee (due in July) is $48 and the monthly servicing fee and finance charges add up to $7, not to mention you must pay a fee for a credit increase.  Now, it doesn't sound like much, but I just feel like I'm throwing money away.  This fall I will begin paying my student loans back; I rather be putting money there. (btw the Compusa is being dropped regardless.)

 

K...the reason it's such an issue is because by spring of next year we (DH and I) plan to resume our search for a house.   I really wanna drop the First Premier, HOWEVER, I know my credit is gonna take a blow... 

 

**So my question is, is dropping the First Premier worth it?  Should I just deal with it till after our goal has been reached?  Or stop throwing my money away?

 

 

Thanks for any advice  

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Re: Should I drop this frickin card or what?

Have you read fused's "Closing Credit Cards" thread? It's linked down below in my siggy.

1. The First Premie should report for 10 years after closing, helping your history. It will most likely fall off much sooner than that on Equifax, though.

2. If you still have balances, it will affect your util to close it, because you will no longer have that whopping $600 in your total credit limit.

So your util will change from $1800 / $3000 + $2500 + $600 = 30% to $1800 / $300 + $2500 = 33%. That might not be enough of a change to effect your scores, though.

3. If you have consolidated your student loans, so that right now you only have 4 open accounts, closing the FP would reduce this to 3, and you would be more likely to be dinged for "too many accounts with balances." But if your loans aren't consolidated, and you still have 8 or whatever separate student loans showing, you're sunk on this anyway.

Can you get your $1800 balances down to $1595 or less before you close the FP? That would put your util on the two remaining cards at 29%, and you probably wouldn't have an immediate score change.

Even if you did, though, if you do get your balances paid off before house hunting, your scores would have recovered.
* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Member
Posts: 17
Registered: ‎10-17-2007
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Re: Should I drop this frickin card or what?

 


haulingthescoreup wrote:

So your util will change from $1800 / $3000 + $2500 + $600 = 30% to $1800 / $300 + $2500 = 33%. That might not be enough of a change to effect your scores, though.

3. If you have consolidated your student loans, so that right now you only have 4 open accounts, closing the FP would reduce this to 3, and you would be more likely to be dinged for "too many accounts with balances." But if your loans aren't consolidated, and you still have 8 or whatever separate student loans showing, you're sunk on this anyway.
***Yep I consolidated the student loans. :smileyhappy:*** 
Can you get your $1800 balances down to $1595 or less before you close the FP? That would put your util on the two remaining cards at 29%, and you probably wouldn't have an immediate score change.
***I actually paid $800 on the balance yesterday. And then $200 for the next few months till its paid off.***
Even if you did, though, if you do get your balances paid off before house hunting, your scores would have recovered.
****That's good to know.  I've been told many different things and then I remembered that I am a member here and I find the best advice here.  Thanks soo much haulingthescoreup for replying so quickly. Much appreciated. Now I'm off to check out the "Closing CCs" thread!****

 

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